New York insurance brokers need to understand new DBL requirements.
Beginning March 1, 2026, the state of New York isn’t allowing insurance brokers to backdate DBL (disability benefits law) and Paid Family Leave policies beyond 30 days. This means that New York businesses found in non-compliance, who aren’t offering their worker DBL policies, can face hefty fines. The DBL Center is not saying this to scare business owners. New companies and existing companies not in compliance need to be aware of the statutes so they can offer the appropriate coverage to employees.
More importantly, employee benefits and P&C brokers should be aware of this opportunity to educate their clients. Brokers are in a unique position to help business owners avoid fines and possible imprisonment with private PFL and DBL policies. Privatizing PFL can offer cost savings and better service. Employers can use the savings to enrich DBL coverage beyond the state maximum of $170 per week.
Consequences of Ignoring DBL and PFL Requirements in New York
If a business with employees in New York fails to secure DBL and PFL policies, it’s considered a misdemeanor. The crime is punishable by fines from $100 to $500, imprisonment for up to one year, or both a fine and imprisonment, according to the Workers’ Compensation Board.
A second violation within five years bumps the fine to a minimum of $250 up to $1,250, while a third and any subsequent violations within five years could lead to fines of $2,500. The employer is also liable for the total value of any disability or PFL claims paid within the time of non-compliance, or 1% of the employee’s salary during noncompliance, whichever is greater.
New Businesses Represent New Commissions
Between March 2023 and March 2024 (the most recent range for which data is available), 66,875 new businesses opened in New York, according to the Small Business Administration. Currently, 2.4 million small businesses operate in New York.
This represents tens of thousands of opportunities for brokers across the state to educate small business owners and help them save money on private DBL and PFL coverage. New York businesses represent almost 7% of all the small businesses across the US, and 36% of New York small businesses are less than five years old. If these companies have been coasting without PFL and DBL coverage, they could risk hefty fines.
How Can Brokers Help
With so much at stake, brokers are in a unique position to find business owners in their region and share the new law. You’re not just ensuring that New York employees receive the benefits they deserve; you’re helping business owners avoid fines, penalties, and potential jail time.
By helping them privatize PFL and DBL, they can save money and enhance their benefits packages, too.
Don’t Let Policies Lapse
The law is equally important for existing businesses. Insurance agents have been notably lax in enforcing on-time payments for PFL and DBL policies in the past. Late renewals leads to late commissions and cash flow issues for insurance brokers.
But now it can also lead to steep fines for clients.
The Broker Dashboard: Net Revenue Tracker sends automatic notifications straight to your inbox regarding cancellations, commissions, and renewals. You can stay on top of policies to help your clients avoid penalties and you’ll collect commissions on time.
An end to backdating sounds scary at first, until you realize it’s just enforcement that should have happened all along. Let’s help New York business owners stay on track, pay their bills on time, and improve cash flow for brokers.
Need help? The DBL Center is here to get you connected to our Broker Dashboard: Net Revenue Tracker right now.
FAQ
What is the penalty for DBL in NY?
Business owners found not in compliance with Disability Benefits Law could face fines of $100 to $500, and/or imprisonment up to one year. After five years of non-compliance, business owners could pay fines of $250 to $1,250. Any third violations within that five-year period could lead to fines of up to $2,500.
Is disability insurance mandatory in NY?
Providing short term disability to workers in New York is mandatory for most private employers after an employee works 30 days. Failure to comply is a misdemeanor for business owners. Sole proprietors and S-Corps with no employees are not required to provide DBL insurance.
Are employers required to provide disability insurance?
Employers in New York, New Jersey and Hawaii are required to provide disability insurance to employees through the state or a private insurance plan. The private plan must offer benefits equal or better than the state plan, with premiums the same or lower than the state plan.
Why should employers provide statutory disability insurance to employees?
Statutory disability insurance is required in New York, New Jersey and Hawaii. Business owners in these states can face fines and penalties if they don’t provide a disability policy through the state plan or an approved private insurance carrier.
